Monday saw a major reversal in many stocks and severe deterioration in the market internals. The GMI is now at +4. There were few successful 10 day new highs–only 37% of the 233 stocks in my universe of 4,000 stocks that hit a new high ten days ago closed higher on Monday than they did 10 days before. Breakouts are failing. The daily QQQQ Index is very close to going negative–it needs one more down day. Only 17% of the Nasdaq 100 stocks advanced on Monday, along with 15% of the S&P 500 stocks and 30% of the Dow 30 stocks. Only 37% (-9) of stocks are in a short term up trend and only 19% of stocks are within 5% of a new high. Still, 62% of stocks closed above their 10 week averages, and the QQQQ is above its 10 week average, so the longer term up trend is intact. This was the 34th day of the QQQQ up trend (U-34) but another down day will indicate a reversal in the short term trend……….
All but one of my positions have been stopped out and I am mainly in cash. This market is too risky for me to be long. Even GOOG had what may turn out to be a minor top on Monday. It touched 446.21 and reversed on heavy volume to close down (-5.55), at 424.60. Too many of the leaders have stalled. Be careful.
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